Detroit-Based Firm Increases Ownership Stake in Millennium Pipeline

DETROIT — DT Midstream, an owner, operator and developer of natural gas interstate and intrastate pipelines, announced Thursday that it is acquiring an additional 26.25% ownership interest in the Millennium Pipeline.

The company said the $552 million transaction will be financed with cash on hand and available capacity under the company’s revolving credit facility.

Under the terms of the agreement, DTM will acquire National Grid’s full ownership interests in Millennium Pipeline, which, upon closing, will bring DTM’s total ownership of the pipeline to 52.50%.

Millennium Pipeline is a 263-mile interstate pipeline, strategically positioned to deliver Northeast Marcellus and Utica gas to utility and power plant markets across New York State and New England. 

According to GlobalData, a leading data and analytics company, natural gas development from Marcellus and Utica shales was largely unaffected by the COVID-19 pandemic, and natural gas production at these sites is expected to rise at a compound annual growth rate of 5.1% to reach a combined 38.3 billion cubic feet per day by 2025.

“Increasing our ownership in a premium integrated asset like Millennium Pipeline directly aligns with our strategic investment thesis and accelerates our growth plan,” said David Slater, president and CEO of DTM. 

“This transaction also increases the revenue contribution from our pipeline segment, underpinned by take-or-pay contracts with high credit quality customers,” he added.

DTM was a founding developer and existing owner in Millennium Pipeline, which has been in service since 2008. 

The pipeline is also interconnected with the company’s wholly owned Bluestone Gathering Lateral Pipeline, which has upstream connections to its Susquehanna Gathering System.

Jeff Jewell, executive vice president and CFO of DTM, said, “This transaction will be immediately value accretive and, given the strength of our balance sheet, will be fully funded with cash on hand and available credit capacity.”

Dan can be reached at [email protected] and @DanMcCue